Power companies blow fuse as states want switch-off

New Delhi: Panic-stricken thermal and renewable power producers have rushed to the government seeking immediate help as states have started invoking the ‘force majeure’ clause in their contracts to ask projects to shut down because of low demand, and not paying even fixed costs during the period.

Power producers have told the government that this will lead to cash flow problems and unavoidable disruption in power supply. Power companies say distribution companies have misinterpreted a statement issued by the Union power ministry last week invoking its special powers to direct the central power regulator to provide three-month moratorium to make payments to generating companies and transmission licensees and not to levy penal rates of late payment surcharge.